UpdateLyondellBasell asks court to approve settlement plan

?xml:namespace>TORONTO (ICIS news)--LyondellBasell asked a US bankruptcy court on Thursday to approve a proposal to settle its debt claims.

The company, whose US operations filed early this year for bankruptcy protection, said it received substantial creditor support for its plan to reorganise the company and come out of US bankruptcy protection.

The proposal includes $300m (€210m) in cash payments for unsecured creditors; the resolution of claims against LyondellBasell’s secured senior and bridge lenders; and the possible raising of $2.8bn through the raising of equity.

The company also entered into a “Plan Support Agreement” (PSA) with holders of significant amounts of its pre-petition secured debt, it said.

“The PSA represents an important and significant step toward obtaining a consensual reorganisation for LyondellBasell,” the company said.

Lyondell said its proposed settlement reflects an agreement with secured senior and bridge debt holders to convert $18bn of debt into common equity and the allocation of that equity among those debt holders.

Unsecured creditors of Lyondell Chemical, - the main US operation of LyondellBasell - have urged that the company fairly evaluates proposals from suitors such as India’s Reliance.

Lyondell's equity commitment agreement (ECA), which it entered into on 11 December, "does not prohibit the company from considering other bona fide proposals it may receive with respect to the purchase of its equity upon emergence," it said.

Reliance’s bid is said to be worth $10bn-$12bn, according to news reports.